US mortgages from abroad: why lenders balk and who still says yes

You can get a US mortgage while living overseas, but most of the hard part is proving your foreign income in a way an American underwriter will accept.

The short version

• Foreign income isn't banned, it's just harder to document. Fannie Mae and Freddie Mac rules allow it, but they want signed US tax returns and a dollar conversion, and many lenders add stricter rules of their own [1].
• Your US tax returns are the backbone of the file. If you skipped filing, or excluded all your pay with Form 2555, expect tough questions [1][3].
• Occupancy decides the loan type. A "principal residence" loan means you move in within 60 days. If you won't, it's a second home or an investment loan, with bigger down payments and higher rates [2].
• Shop by lender type, not by billboard. Banks with international or private banking units, portfolio lenders and non-QM lenders are where most expats end up.
• Plan for remote signing. Embassy notary slots are scarce, so build in weeks, not days [5].

Why so many US lenders say no

Most US mortgages are written to be sold to Fannie Mae or Freddie Mac. The loan officer's software, the underwriter's checklist and the pricing all assume a borrower with a US employer, US pay stubs and a W-2. You break that pattern in several ways at once.

Your income is in another currency

Both agencies accept foreign income, but with conditions. Fannie Mae asks for the borrower's two most recent signed US federal income tax returns; Freddie Mac asks for the most recent one. Both want proof the income will continue and a calculation converting it to US dollars [1]. Exchange rates move, so some underwriters knock a cushion off foreign pay to protect themselves against a weaker currency.

Many lenders add "overlays," their own stricter rules on top of agency rules. A common overlay is simply "no foreign income." That's why one bank can say no flatly while another approves the same file.

Your employer is hard to verify

A US underwriter can phone an American HR department or use an automated employment check. A school in Seoul or an engineering firm in Stuttgart is another story. Expect to provide an employment letter in English (or with a certified translation), recent payslips and bank statements showing the pay landing.

Your tax return may show very little income

Here's the catch for many expats. If you claim the foreign earned income exclusion, your Form 1040 can show a large salary that's mostly excluded. The cap is USD 130,000 for tax year 2025 and USD 132,900 for 2026 [3]. Lenders generally look at gross income documented on your returns and supporting paperwork, but some underwriters get uneasy when taxable income is near zero. Be ready to walk them through Form 2555 line by line. If you haven't filed at all for a few years, catch up first; a lender will usually ask you to sign a form allowing it to pull IRS transcripts.

Your credit file has gone quiet

US credit scores need US activity. If you closed your cards when you moved, your file can thin out or go stale. Keep at least one or two US cards open and in use, paid in full each month, with a US billing address. Our guide to keeping a US bank account and US address covers how to do that without tripping a bank's foreign-address rules.

Which lenders lend to Americans abroad

We don't recommend specific lenders, but these are the types where expats tend to have luck:

A few things to ask any lender up front, before you pay an application fee:

1. "Do you accept foreign-currency income, and how do you convert it?"
2. "Do you lend to borrowers who live in my country?" Some lenders restrict certain countries for compliance reasons.
3. "Can I close remotely, and do you accept embassy or online notarization?"
4. "What down payment and reserves do you require for a second home or investment property?"

A loan officer who hesitates on the first question has given you your answer.

Primary home, second home or rental?

The type of loan follows how you'll use the house, and lying about it is mortgage fraud. Under Fannie Mae's definitions, a principal residence is a property you occupy and use as your primary residence within 60 days of signing. A second home must be a one-unit home you occupy for part of the year and keep under your exclusive control. An investment property is anything else [2].

• Moving back soon? A principal residence loan can work if you'll genuinely move in within that window. This is the classic "buy before you fly home" plan, covered in our guide to buying US property while living abroad.
• Want a base for summer visits? That's usually a second home loan.
• Plan to rent it out? That's an investment loan, priced higher, and rental income from abroad comes with its own US tax rules.

The documents lenders want from expats

Gather these before you apply. Scanned PDFs in one folder will save you days of back-and-forth across time zones.

Identity and residence

• US passport (and your foreign residence permit, if you have one)
• Proof of your foreign address
• A US mailing address and a US phone number that receives texts

Income

• Two years of signed US federal tax returns, including Form 2555 or Form 1116 if you filed them [1][3]
• Recent payslips and an employment letter stating your role, salary, start date and that the job is permanent
• Your foreign employment contract
• Foreign tax returns or tax certificates, where your country issues them
• Certified English translations of anything not in English

Assets

• Recent statements for every account you'll use for the down payment and reserves, US and foreign
• A paper trail for any large deposit, especially money moved from a foreign account
• Gift letters if family is helping

Lenders look at your foreign accounts the same way the IRS does, so make sure your FBAR filings are up to date. An underwriter seeing a foreign account you never reported is an awkward conversation.

A note on conversions

Don't do the currency math yourself and hope it matches. Lenders use their own source and date. As a ballpark, a salary of EUR 90,000 is about USD 100,500 at the Federal Reserve H.10 rate of 1.1163 dollars per euro on October 30, 2026. A lender with a cushion might count noticeably less.

Closing from overseas

Once you're approved, the closing itself is mostly paperwork and timing.

• The Closing Disclosure must reach you at least three business days before closing, so you can compare it with your Loan Estimate [4]. Across time zones, ask for it by email the moment it's issued.
• Notarization is the bottleneck. US embassies and consulates notarize documents by appointment, typically USD 50 per signature with seal, and slots can be very limited, with no emergency appointments [5]. The embassy won't explain the documents or supply witnesses [5].
• Remote online notarization is accepted in most states, but check that your title company and lender will take it before you book [5].
• A power of attorney lets someone stateside sign for you. Many lenders insist on approving the POA before closing, and some won't accept one at all for a cash-out or investment loan. Our guide to powers of attorney and notaries explains the options.
• Wire fraud targets closings. Confirm wiring instructions by phone using a number you already have, never one from an email.

Wire the down payment from a US account where you can. A big international transfer days before closing can trigger extra source-of-funds checks.

What feels different from buying stateside

At home, a pre-approval can take a day. From abroad, budget several weeks from application to closing, and longer if you're self-employed. You'll repeat yourself to underwriters who've never seen a foreign payslip, and you'll learn more about your own tax return than you ever wanted to. The upside: once the loan closes, a US mortgage is serviced the same way wherever you live. Payments come out of your US account, and the lender doesn't care which time zone you're in.

A US expat tax preparer (or a lawyer) can check how your returns will read to a lender before you apply, which is a lot cheaper than a rejection.

Sources

1. ULS Job Aid: Foreign Income (Fannie Mae and Freddie Mac requirements), Radian
2. B2-1.1-01, Occupancy Types, Fannie Mae Selling Guide
3. Figuring the foreign earned income exclusion, IRS
4. What is a Closing Disclosure?, Consumer Financial Protection Bureau
5. Notarials, US Embassy and Consulates in Mexico

Keep reading

• Buying US property while living abroad
• Refinancing your US mortgage from abroad
• Foreign earned income exclusion vs foreign tax credit
• Keeping a US bank account and US address